Thompson v. Trinity Universal Ins. Co.
| Decision Date | 17 April 1986 |
| Docket Number | No. 12-85-0023-CV,12-85-0023-CV |
| Citation | 708 S.W.2d 45 |
| Parties | Dorothy THOMPSON, Appellant, v. TRINITY UNIVERSAL INSURANCE COMPANY, et al, Appellees. |
| Court | Texas Court of Appeals |
John R. Brumbelow, Tyler, for appellant.
Larry L. Gollaher, Gollaher & Hart, Dallas, Michael G. Carroll, Potter, Guinn, Minton, Roberts & Davis, Tyler, for appellees.
This is an action brought to recover proceeds alleged due under a builder's risk policy of insurance.
Appellant Thompson was the sole owner of Thom-Heck, Inc., a corporation established by her late husband. In October of 1979, Thom-Heck, Inc., purchased approximately 197 acres on Lake Palestine. A "make-believe western city," Frontier City, was located on that property. Frontier City had been used as a resort in previous years, but at the time the land was purchased, many of the buildings had collapsed or fallen into a hopeless state of disrepair. Still standing was a building which had been used as a hotel ("hotel" or "building"), which Thompson testified was "structurally sound," but in need of "cosmetic" repair. The two-story hotel contained a commercial kitchen, dining room, bar, and ten bedrooms with baths.
Thompson approached Milton Evans, an insurance agent representing appellee Trinity Universal Insurance Company ("Trinity"), about insuring the hotel. Evans told her that he would not insure the building until remodeling was started. Once renovations began, a builder's risk policy in the amount of $100,000.00 ("policy") was issued by Trinity for the period from December 24, 1980, to December 24, 1981. Security National Insurance Company ("Security"), co-defendant at trial, insured the contents.
A fire occurred on January 20, 1981, completely destroying the building and contents. Thompson testified that the work being done at the time of the fire included realigning the building, repairing the roof, renovating the air conditioner, concreting the front boardwalk, varnishing the paneling and painting the bedrooms. Thompson notified the insurance agent of the fire and was told that the builder's risk policy covered materials and labor used in renovating the building, but not the building itself. Appellant filed suit to recover under the policy.
Trial was before a jury, who found the actual cash value of the property destroyed by fire to be:
1. Building--$35,000.00.
2. Improvements to building--$10,899.17.
3. Household goods stored--$650.00.
4. Materials in building for making alterations, extensions and repairs--$440.00.
On the basis of the jury's findings, the trial court entered judgment in favor of Thompson against Security for $650.00 (household goods) and against Trinity for $11,339.17 (improvements and materials). The trial court did not award Thompson recovery for loss of the building.
Thompson asserts in her first point of error that the trial court erred in refusing to award recovery for the $35,000.00 loss of the building. Trinity responds by arguing that the policy covered materials and labor that went into renovating the building, but not the building itself. Trinity argues that the policy is ambiguous and the circumstances surrounding its execution showed that the parties understood that the existing hotel building was not insured.
We find no ambiguity in the wording of the policy. Standard Texas Form 21 was attached to the policy and incorporated as a description of the property to be insured. Paragraph 1 of that attachment states:
This policy being for an amount not to exceed One hundred per cent (100%), hereinafter referred to as 'this Company's percentage of liability,' of the actual values existing in any building or structures described below, from time to time as values are added, and not to exceed in any event 'this Company's percentage of liability' of the 'Estimated Completed Cost ...'
(Emphasis added.) The estimated completed cost of the building, described as a frame construction with intended occupancy as "Frontier City Old West Building," is listed as $100,000.00.
Paragraph 2 states in pertinent part:
This policy as to each or any building or structure above described shall be and constitute insurance on each or any of the said building or structures while in course of construction in an amount not to exceed 'this Company's percentage of liability' of the actual values which may have been placed into or made a part of each or any of such buildings or structures.
(Emphasis added.)
Obviously, the contemplated structure when completed would be composed not only of new materials, but of the existing building itself. Through renovation, the existing building was to be "made a part of" the final structure. While Trinity's agent may have refused to insure the original building for its intended use prior to renovation, that refusal is not tantamount to saying it had no value. In fact, the jury found the actual loss suffered as a result of the destruction of the hotel, exclusive of improvements, to be $35,000.00.
The plain meaning of the provision cited is that the existing structure is covered by the policy. We see no other provisions within the policy which are inconsistent with our interpretation. Where the language of an insurance contract is plain, it must be enforced as made. Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936, 938 (Tex.1984); Vanguard Ins. Co. v. Stewart, 593 S.W.2d 736, 739 (Tex.Civ.App.--Houston [1st Dist.] 1979), aff'd, 603 S.W.2d 761 (Tex.1980).
In addition to claiming the policy did not cover loss of the building, Trinity suggests that coverage should have been denied because Thompson did not have an insurable interest in the building. Trinity points to the fact that title to the 197 acres and improvements was in Thom-Heck, Inc., not Thompson personally. While Trinity's contention would more properly have been raised by cross-point, we will consider it.
It is not always necessary to prove title to show an insurable interest in property; the generally accepted rule was set out in Smith v. Eagle Star Ins. Co., 370 S.W.2d 448, 450 (Tex.1963):
"[A]n insurable interest exists when the assured derives pecuniary benefit or advantage by the preservation and continued existence of the property or would sustain pecuniary loss from its destruction ..."
See also St. Paul Fire & Marine Ins. Co. v. Daughtry, 699 S.W.2d 321 (Tex.App.--San Antonio 1985, writ Ref. N.R.E.) The claimant has the burden of proving an insurable interest. See Monarch Fire Ins. Co. v. Redmon, 109 S.W.2d 177, 178 (...
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